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Payday loan alternatives

You have other options to consider before taking out a payday loan.

There’s one particularly good reason to stay away from payday loans: they’re painfully expensive. It’s not uncommon to see a 400%+ annual percentage rate (APR) – and that’s following provincial regulations.

Before taking out a payday loan, look into alternatives.

1. Consider an installment loan

An installment loan is a type of personal loan offered by online lenders. You can typically get an installment loan quickly and with lower APRs and longer repayment terms than a payday loan. Instead of making 1 lump sum payment, you will make repayments in installments over a set period of time. Lenders may look at your credit score when you apply, but they will more likely be interested in your ability to repay your loan.

An installment loan is a decent payday loan alternative because it’s often offered to the same type of customer as payday loans.

Pros

  • Loan terms between 3 and 60 months. You can choose a loan term that complements how much you can afford in monthly payments.
  • Bad credit is considered. There are some lenders that can finance you even with bad credit.
  • Loan amounts over $1,500. A payday loan maxes out at $1,500. An installment loan is typically between $500 and $10,000.

Cons

  • High interest rates. APRs typically range from 20% to 47%. Borrowers with poor credit scores will face higher interest rates.

Compare installment loans

Name Product Interest Rate Loan Amount Loan Term Requirements Link
Money Mart Installment Loan
OFFER
Money Mart Installment Loan
29.90% - 46.90%
$1,000 - $15,000
12 - 60 months
Requirements: min. credit score 300
Go to site
More Info
Get a $100 eGift card when you apply online, connect your bank account using Express and make your first payment.
LoanConnect Installment Loan
LoanConnect Installment Loan
32.00%
$500 - $2,500
3 - 6 months
Requirements: current debt must total less than 60% of income, min. credit score 300
Go to site
More Info
Get approved by different lenders in as little as 60 seconds with any credit score.
Loans Canada Installment Loan
Loans Canada Installment Loan
8.00% to 46.96%
$500 - $50,000
3 - 60 months
Requirements: min. credit score 300
Go to site
More Info
A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders.
Mogo Installment Loan
Mogo Installment Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Requirements: min. income $13,000/year, min. credit score 500
100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
Go to site
More Info
Get a free quote without affecting your credit score and get a loan on the same day. Track your credit score for free.
SkyCap Installment Loan
SkyCap Installment Loan
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Requirements: min. income $1,200/month, stable employment, min. credit score 550
Go to site
More Info
Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
Fairstone Installment Loan
Fairstone Installment Loan
26.99%-39.99%
$500 - $25,000
6 - 60 months
Requirements: able to make monthly repayments, min. credit score 560
Go to site
More Info
Get a quote in minutes without affecting your credit score. Finalize your loan application online and get your funds as quickly as the same day.
Cash Money Installment Loan
Cash Money Installment Loan
46.93%
$500 - $10,000
6 - 60 months
Requirements: stable source of income, min. credit score 560
Go to site
More Info
Online installment loans are available in Alberta only. Residents of Manitoba and New Brunswick must apply in-store.
Loan Away Installment Loan
Loan Away Installment Loan
19.90% - 45.90%
$1,000 - $5,000
6 - 36 months
Requirements: min. credit score 300
Go to site
More Info
A lender that approves loans in as little as 20 minutes. Get affordable monthly repayments with any credit score.
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Installment loans

2. Get a line of credit

Although you may not be able to get a line of credit from a bank, you may be able to get one from an online lender. With a line of credit, you can borrow up to a limit and pay interest on the amount you borrow. It’s a decent payday loan alternative because of its open term.

Pros

  • Open term. Pay off your loan partially or in full any time. Since you’re not required to pay back the loan within a very short period of time, your finances have more time to recover.
  • Potentially cheaper than a payday loan. Mogo, for example, says its MogoMini line of credit is 88% cheaper than a payday loan.

Cons

  • Expensive. Interest rates can be as high as 47%.
  • Potentially pay more interest. With an open term, it can be tempting to hold off on repaying your loan. But if you take too much time to pay off your loan, you could end up paying more interest than a payday loan.
  • Risk of borrowing more. You only need to apply once to borrow up to your limit whenever you want. With easy access to funds, it can be tempting to borrow more than you need.

Compare lines of credit from online lenders

Name Product Interest Rate Loan Amount Loan Term Requirements Link
Mogo Mini Line of Credit
Mogo Mini Line of Credit
47.42%
$1,000 - $3,500
No end dates
Requirements: min. income $13,000/year, min. credit score 500
Go to site
More Info
Apply online and get pre-approved in just 3 minutes. Non-employment income also accepted. Pay back loan at any time.
Cash Money Line of Credit
Cash Money Line of Credit
46.93%
$100 (in store), $500 (online) - $10,000
No end dates
Requirements: min. credit score 560
Go to site
More Info
Residents in AB, BC, NL, NS, ON and SK can apply online. Residents of MB or NB can apply in-store only.
LendDirect Line of Credit
LendDirect Line of Credit
19.99% - 46.93%
$100 - $15,000
No end dates
Requirements: min. income $1,500/month, min. credit score 560
Go to site
More Info
If approved, receive access to funds in as little as 15 minutes.
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Personal lines of credit

    3. Apply for a bad credit personal loan

    A bad credit personal loan is similar to an installment loan. With a bad credit personal loan, those with a credit score below 560 can apply for and receive a loan amount that they will pay back in installments over time. This is a decent payday loan alternative due to its lower APRs and longer terms.

    Pros

    • Loan terms are between 3 and 60 months. A payday loan is repaid by your next payday (within 1 to 4 weeks). With a bad credit personal loan, you can get a longer term.
    • Bad credit is OK. Lenders will prioritize your income over your credit score.
    • Higher loan amounts than a payday loan. You can usually borrow up to $15,000 with a bad credit personal loan.

    Cons

    • High interest rates. APRs typically range from 15% to 47%.

    Compare bad credit personal loans

    Name Product Interest Rate Loan Amount Loan Term Requirements Link
    Spring Financial Personal Loan
    Finder Rating: 4 / 5: ★★★★★
    Spring Financial Personal Loan
    17.99% - 46.96%
    $500 - $15,000
    9 - 48 months
    Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
    Go to site
    More Info
    If you're not eligible for an unsecured loan, you may be offered a credit builder loan to help improve your credit score.
    LoanConnect Personal Loan
    LoanConnect Personal Loan
    Secured from 1.90%, Unsecured from 5.75%-46.96%
    $500 - $50,000
    3 - 120 months
    Requirements: currents debts total less than 60% of income, min. credit score 300
    Go to site
    More Info
    Fill out one application with this broker and get pre-approved by different lenders in 5 minutes.
    Mogo Personal Loan
    Finder Rating: 4.5 / 5: ★★★★★
    OFFER
    Mogo Personal Loan
    9.90% - 46.96%
    $200 - $35,000
    6 - 60 months
    Requirements: min. income $13,000/year, min. credit score 500
    100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
    Go to site
    More Info
    Get a free quote without affecting your credit score and get a loan on the same day. Track your credit score for free.
    SkyCap Financial Personal Loan
    Finder Rating: 4.1 / 5: ★★★★★
    SkyCap Financial Personal Loan
    12.99% - 39.99%
    $500 - $10,000
    9 - 36 months
    Requirements: min. income $1,200/month, stable employment, min. credit score 550
    Go to site
    More Info
    Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
    Loans Canada Personal Loan
    Loans Canada Personal Loan
    Secured from 2.00%, Unsecured from 8.00% to 46.96%
    $300 - $50,000
    3 - 60 months
    Requirements: min. credit score 300
    Go to site
    More Info
    A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders.
    FlexMoney Personal Loan
    Finder Rating: 4 / 5: ★★★★★
    FlexMoney Personal Loan
    18.90% - 46.93%
    $500 - $15,000
    6 - 60 months
    Requirements: min. income $2,000/month, 3+ months employed, min. credit score 500
    Go to site
    More Info
    Apply in less than 10 minutes and if approved, receive financing in as little as 24 hours. Pay off your loan any time without penalty.
    Loan Away Personal Loan
    Finder Rating: 3.6 / 5: ★★★★★
    Loan Away Personal Loan
    19.90% - 45.90%
    $1,000 - $5,000
    6 - 36 months
    Requirements: min. credit score 300
    Go to site
    More Info
    A lender that approves loans in as little as 20 minutes. Get affordable monthly repayments with any credit score.
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    Bad credit personal loans

    4. Consolidate your debt

    If high-interest debt is holding you back from meeting your other financial obligations, you might benefit from consolidating that debt. This means borrowing a larger sum of money to pay off multiple debts, then focusing on paying off that 1 loan. Consolidating your debt reduces the confusion of having multiple payments and may even offer a lower monthly payment while you eliminate your debt. You could save on interest and pay off your debt faster.

    Pros

    • Easier to manage. If you combine your debts into 1 loan, then you only need to make 1 payment each month.
    • Potentially lower interest rate. Depending on your finances, you may get a lower interest rate than what you currently have.

    Cons

    • May not qualify for a lower rate. If your finances are in bad shape, you may not qualify for a lower interest rate.

    Compare debt consolidation loans

    Name Product Interest Rate Loan Amount Loan Term Requirements Link
    Mogo Personal Loan
    Finder Rating: 4.5 / 5: ★★★★★
    OFFER
    Mogo Personal Loan
    9.90% - 46.96%
    $200 - $35,000
    6 - 60 months
    Requirements: min. income $13,000/year, min. credit score 500
    100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
    Go to site
    More Info
    Get a free quote without affecting your credit score and get a loan on the same day. Track your credit score for free.
    goPeer Personal Loan
    Finder Rating: 3.6 / 5: ★★★★★
    goPeer Personal Loan
    8.00% - 33.92%
    $1,000 - $25,000
    36 - 60 months
    Requirements: recommended income $40,000/year, no payday loan debt, min. credit score 600
    Go to site
    More Info
    Connects creditworthy Canadians looking for a loan with Canadians looking to invest. Apply in minutes and get a response within 24 hours.
    SkyCap Financial Personal Loan
    Finder Rating: 4.1 / 5: ★★★★★
    SkyCap Financial Personal Loan
    12.99% - 39.99%
    $500 - $10,000
    9 - 36 months
    Requirements: min. income $1,200/month, stable employment, min. credit score 550
    Go to site
    More Info
    Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
    Loans Canada Debt Consolidation Loan
    Loans Canada Debt Consolidation Loan
    Secured from 2.00%, Unsecured from 8.00% to 46.96%
    $300 - $50,000
    3 - 60 months
    Requirements: min. credit score 300
    Go to site
    More Info
    A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders.
    LoanConnect Debt Consolidation Loan
    LoanConnect Debt Consolidation Loan
    5.99% - 47.42%
    $500 - $35,000
    12 - 60 months
    Requirements: min. credit score 300
    Go to site
    More Info
    A broker that matches borrowers to lenders offering debt consolidation loans. Get approved for multiple loan offers from different lenders.
    Fairstone Debt Consolidation Loan
    Fairstone Debt Consolidation Loan
    19.99% - 39.99%. Varies by loan type and province
    $500 - $50,000
    6 - 120 months
    Requirements: able to make monthly repayments, min. credit score 560
    Go to site
    More Info
    Consolidate your debt up to $20,000 for an unsecured loan and $50,000 for a secured loan.
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    Debt consolidation loans

    5. Look into a credit card cash advance

    A credit card cash advance is cash borrowed from the credit limit of your card. Cash advances aren’t always the best option because of their high APRs, but if you’re in urgent need of funds, the fees and terms may be better than those of a payday loan. It’s often better to take the high interest rate of a cash advance that you can pay off over a longer term.

    Pros

    • Speed and convenience. You can get a credit card cash advance by withdrawing from an ATM.

    Cons

    • Interest accrues immediately. There is no grace period with a credit card cash advance. The moment you withdraw the cash, interest will be charged on the amount.
    • Expensive. Even though they have lower APRs than payday loan, they are still an expensive option.
    • Additional fees. You may be charged fees in addition to the interest.

      Credit card cash advances

      6. Negotiate with your creditors

      At the end of the day, your creditors want to get paid, and they may be willing to work with you to ensure that they do. Contact them and tell them you’re having trouble keeping up with your debt. They may help you create a repayment plan or extend your due date to ease your financial burden. You’d be surprised how many lenders are willing to help you work through your tough financial situation.

      Pros

      • No additional debt. You’re not taking on more debt that could make your financial situation worse.

      Cons

      • Creditors may not be willing to negotiate. Unfortunately, this option is only feasible if you have creditors who are willing to work with you.

        7. Seek credit counselling

        A credit counsellor can help you create a budget and a debt repayment plan. The main benefit to credit counselling is solving the structural issues that led to your financial problems in the first place, whether it’s your lack of budgeting, your low income or your overspending.

        Call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). It may be hard to see the light at the end of the tunnel right now, but we recommend investing a bit of time to organize your finances through counselling. The effort you spend now on this payday loan alterative will pay off over the long run.

        Pros

        • Free or low cost. You can receive valuable advice on how to improve your finances at little to no cost. If there is a cost, Credit Counselling Canada will let you know first.

        Cons

        • No funds provided. Credit Counselling Canada does not loan money.

        8. Get a personal loan with a cosigner

        A cosigner is a friend or family friend whose finances are in good shape. By cosigning the loan application with you, they act as a guarantor. If you default on your loan repayments, they are on the hook to cover those payments on your behalf. This is a great payday loan alternative if you can responsibly manage your repayments.

        Pros

        • Higher chance of approval. Having a guarantor means lower risk for the lender, so they are more likely to approve you. You may even be able to get a lower interest rate.

        Cons

        • Cosigner responsibilities. Your cosigner needs to meet the lender’s criteria to qualify. Also, if you default on your payments, your cosigner’s finances will also suffer, which can damage your relationship.

          Personal loans with a cosigner

          9. Consider a debt relief service

          It’s not for everyone, and sometimes debt relief companies can do more harm than good. However, if you’re truly facing financial hardship and even considering bankruptcy, then a debt relief company is a legitimate payday loan alternative. A debt relief company can help you come up with a solution to reduce and manage your debt.

          Pros

          • Get out of debt. A debt relief company can help you get out of debt through services like credit counselling, debt management and debt consolidation.

          Cons

          • It’s risky. If a debt relief company advises you to stop paying your creditors, your finances could suffer more.

          See if a debt relief company is right for you

          Name Product Costs Requirements
          Debt.ca
          Varies (depends on the company you're connected with)
          Have at least $10,000 in unsecured debt and a hardship that is preventing you from paying your creditors
          A nationwide service that can help you find a solution to reduce your debt payments by up to 50%. Request a free consultation with a trained debt relief specialist.
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            How debt relief companies work

            10. Get a secured loan

            A secured loan is a loan backed by collateral. There are many types of collateral you can use, such as your home, car or jewelry. A secured loan is a good payday loan alternative, especially if you’re looking for lower rates, but if you default on your loan, the lender can repossess your asset.

            11. Ask friends or family for help

            It can hurt your pride, but you should consider asking your friends or family to help cover your short-term financial needs. They may be more than happy to lend a hand. This payday loan alternative often has the advantage of no interest, but you should focus on repaying your friends or relatives promptly.

            Pros

            • Flexibility. Since you’re negotiating with a loved one, you can ask for a low or no interest rate and a loan term that works best for your financial situation.

            Cons

            • Can hurt relationships. Finances are a sensitive subject, and if you don’t follow the terms of your loan, you could damage your relationship with your friends or family.

              12. Look into side jobs

              If you find yourself just short of cash, you could consider finding a small, quick job that allows you to collect some cash. Car and house sharing, selling unwanted items and market research are a few ways you can bring in money if you have extra time. The effort may pay off double-time: you won’t have to pay interest on a loan, and you could discover a new stream of consistent income. This is a great payday loan alternative since you’re increasing your income rather than taking on more debt.

              Common side jobs

              • Deliver food through Uber Eats, SkiptheDishes or DoorDash
              • Drive through Uber or Lyft
              • Shop for and deliver groceries through Instacart
              • Dog walk through Rover
              • Sell unwanted items through Facebook, Kijiji, Craigslist or OfferUp

              13. Get overdraft protection

              An overdraft protection is a service offered by your bank that allows you to withdraw more than what you have in your bank account.

              Pros

              • Transaction will go through. Instead of facing non-sufficient funds (NSF) fees, your cheques will clear.
              • Available for emergencies. You get quick access to cash when you’re in urgent need of funds.

              Cons

              • Fees. This service comes with fees, either monthly or per overdraft.
              • Risk of overspending. This is a convenient service, but you run the risk of using overdrafts too much.

              14. Get a loan from a credit union

              You may be able to take out a small loan with a credit union. Credit unions are known for offering loans at great rates. Furthermore, they’re often more willing to look at additional approval factors besides finances when extending loans, such as how long you’ve held your account with them. If you can qualify, this is a better payday loan alternative than other loans with high interest rates.

              Pros

              • Competitive rates. Credit unions can offer some of the lowest interest rates for personal loans.

              Cons

              • Membership required. You may be required to have a membership to access their products.
              • Stricter eligibility criteria. You will need to meet stricter requirements than the other loans mentioned above.

                15. Ask your employer for an advance

                It can be an uncomfortable conversation, but you can politely ask your boss for an advance. Choose a time when your boss is calm and relaxed and when your company’s revenue is at a high point. Ask for a one-on-one meeting. Offer to repay by your next payday, but if this isn’t possible, come prepared with a repayment schedule. Also, offer to work more hours or pick up extra shifts in exchange for the advance.

                16. Apply for financial assistance

                Check whether your local charities can help with expenses such as rent and utility bills. You can also check your provincial and municipal websites for government assistance available to you. As an example, the Toronto Rent Bank provides grants to eligible Toronto residents who are behind on their rent or need help with a rental deposit.

                Bottom line

                When money is tight, the last thing you need is pressure to make payments toward a loan. Instead of taking out a payday loan to cover your existing debt, carefully explore your alternatives to make an informed decision on how to best handle your financial situation before taking out another loan.

                Are payday loans available in my province or territory?

                Payday loans are available in all provinces and territories across Canada. You should be aware that payday loans are regulated by individual provinces, meaning costs and fees can vary. Ensure that any lender you choose abides by the laws of the place you live.

                The Yukon, Nunavut and the Northwest Territories do not have their own legislation regulating payday loans.

                Find out how much lenders can charge across Canada

                Frequently asked questions

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